Do’s And Don’ts While Filing Expat Tax Return

February 1, 2022    Accountant Perthwa

You may consider moving from Australia to another country for better income opportunities as an individual. While enjoying your stay amid a new environment, you must not forget other important practical matters. One of these practicalities is filing the Australian tax return. It is always recommended to hire any expat accounting service in Australia for professional assistance. 

But before that, it will be important to be aware of some mistakes expats make while filing their Australian tax returns. This blog discusses some valuable tips for expats from which you can easily understand what you can do and what you should not while completing the process. 

What should you do while lodging your expat tax return?

The foremost thing you must do is identify yourself as a resident or a non-resident. For that, you have to check whether the Australian Taxation Office (ATO) itself considers you a resident while calculating the payable amount. If you satisfy one of the following conditions, they will consider you a resident. 

  • Your permanent residence is in Australia.
  • You stay in Australia.
  • You or your spouse is an employee of the Government of Australia and are currently working overseas at an Australian job post.
  • You’ve stayed in Australia for over half of the financial year.

To-do when you are a non-resident for Australian tax obligations


If you are considered a non-resident, you will need to satisfy one of two obligations. You will still have your AFN (Australian File Number), and therefore, the ATO will expect you to lodge the return. You can choose lodging either a ‘Return Not Necessary’ form or a tax return for the relevant financial year.

But, if you do nothing while still holding an AFN, the ATO will automatically expect that you will lodge the tax return. If you fail to do it, you may have to pay late lodgement penalties. The amount may be as high as $900 for each return. That is why you must always keep yourself updated with information.

According to your Australian income types, whether you will have to lodge an Australian tax return or a ‘Return not necessary’ form. A tax return must be completed if you receive the types of income stated below:

  • Rental income on a property in Australia
  • Income from Australian employment
  • Income from interests
  • Unfranked dividends
  • Annuities or pensions from Australia, if you are not exempt from this condition under a tax treaty
  • Capital gains on assets you hold in Australia

On the other hand, if you do not have any Australian-sourced income, you can hire your tax agent to lodge a ‘return not necessary’ form on your behalf. In this way, it will be possible to fulfil the lodgement deadlines for the specific financial year. 


To-do when you are a non-resident for Australian tax obligations but still an Australian citizen


As per rules, most Australian expats are not required to lodge an expat tax return, especially if their major sources of Australian income are dividends and interests.

If it applies to you, you must inform your fund managers and financial institution that you are no longer a resident for Australian tax obligations. This information will help them make sure withholding of the correct tax.

In addition, you must also hire a tax agent to lodge a ‘return not necessary’ form. Once they do it, the ATO will mark that your tax obligations have been satisfied for the particular economic year. 


Declare overseas income


Indeed, taxation will not apply to your overseas income sources. But, it does not mean that you will not include them. It will be important to declare any foreign income you have earned for your Australian tax obligations. 


Include income from property rentals


You must claim income you are earning from any property rental each year. If it is rented out for a specific part of the year, it will be important to adjust the deduction claims according to the period you have rented out the property for.


Back up claims with evidence 


This is one of the vital requirements to consider. Remember that if you do not have sufficient evidence behind your claims, you can only claim a maximum of $300. So, for every expense you include in your tax return, make sure you have solid evidence for backup. For convenience, you may use a folder to keep all the documents in an organised way so that you do not have to hurry at the last minute.


What things should you not do while filing an expat tax return?

Whenever you lodge your expat tax online, there is something you should always avoid, and that is working with estimates.

People often use estimates while filling out their tax returns and face problems with the ATO. You must strictly avoid it, and use accurate figures, instead. Remember that the ATO will cross-examine the figures entered against various income sources. Even if there is a discrepancy of a few hundred dollars, it will catch their eye.

Can You Be Taxed Twice?

Regarding expat tax in Australia, people often ask experts whether double-tax can be imposed on them. Usually, it does not happen. But, if you generate overseas income while being an Australian resident, there is a chance of double-taxing. However, earn the foreign income in a country with a Double Taxation Agreement with the Australian Government. You will get the chance to offset a part of the tax you have paid in that country against your payable tax in Australia.

Who Can Help You?

Expat taxing is a pretty complex area of tax, which means you can easily make mistakes and pay unnecessary money. That is why it will always be a good idea to involve an experienced tax accountant for the purpose. An Australian tax professional will have the necessary knowledge about all the regulations, and thus, will be the best individual to provide the guidance. 

Tax Accountant Perth WA is a top-ranked accounting service provider in Perth that has made its name in the field over many years. They have a compact team of professionals with adequate experience in the industry. Whenever you hire them, they will ensure you the best possible results.

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